Buying a home and renting one both have pros & cons, but which one is right for you depends on each individual situation.
Benefits of Buying
In addition to offering stability and the pride of homeownership, buying has several other major advantages:
All Payments Help You. Instead of paying your landlord every month, you will be paying off your mortgage. This allows you to benefit from increases to property prices in your neighborhood, as any rise in value will be yours should you decide to sell.
More Freedom. As a renter, your landlord’s rules place restrictions on how you can use your space. With the exception of rules laid down by condominium associations, ownership gives you the freedom to do as you please with your space.
An Excellent Investment Strategy. Due to the sector’s continued year-over-year growth, investing in real estate has long been one of the Greater Toronto Area’s most stable and profitable investment options.
More Security. In a city like Toronto, the rental market can be difficult to navigate, and average rents have been rising for years. Buying allows you to lock in a purchasing price, and any rises in the market are a benefit for you (through increased property values) rather than an impediment.
Benefits of Renting
For many, renting can be a stepping stone towards buying their own home, but can also be more suitable long-term depending on a person’s lifestyle. Renting a condominium in particular is relatively hassle-free, and provides a more comfortable living experience than renting a house or room:
Predictable payments. While the amount of rent paid monthly will vary depending on the building, it will normally stay consistent from month to month.
No Responsibility for Maintenance. As a renter, your landlord is responsible for the maintenance of your unit.
No Large Down Payments. When buying a condominium, approximately 10-20% of the purchase price is due up front. It can be difficult to get such a large amount together at one time-a problem that can be avoided through renting.
More Flexibility. Rental agreements typically run no longer than a year. Once they expire, you are free to move to a new home of your choosing. By contrast, selling a condominium is a significantly more expensive and time-consuming endeavor. This is due in large part to buyers still needing to pay land transfer taxes upon purchase, as well as a commission upon selling.
Better for Saving. Renting can often be much cheaper than buying, and provides the ability to save money to purchase a condo in the future.
The Bottom Line
Both buying and renting have their advantages and disadvantages, but those are in large part dependent on perspective. For someone seeking stability, the freedom to decorate their own home to their liking, and a strong investment opportunity, buying a home is the better option. On the flip side, renting often allows for more monthly savings, more short-term flexibility and (in many cases) less responsibility. In short, the question of buying or renting greatly depends on a person’s preferred lifestyle and their own individual needs.